“Oh, we cannot do that because my insurance company will never approve of it!”

“If I have a little fender bender my rates will go up!”

How often have we heard that we just have no say with the insurance companies because all they do is collect premiums and deny claims?

Or, my favorite, your rates are just too high, I cannot afford it!!

When the first insurance companies began, they were merely a community co-op. Some smart business men thought that if they collected a small amount of money from the populace, they could help pay for big claims. If your house burned down or you died, the family could get some small re-imbursement.

The idea grew and the owners of the co-ops began to invest to help grow the funds. If the fund was larger they could help more people and it would not cost anyone very much. Through the years, their funds did grow and people were paid when the bread winner died.

At one time, a life insurance document was a single page and the beneficiary designation always read: “Pay proceeds to bearer”. So the first person to go through the deceased belongings got the “spoils”, because all he/she had to do was present the document and get the money! Needless to say, that system changed and evolved until today you must have a named beneficiary. The beneficiary must have an insurable interest……..meaning they will suffer financially upon the death of the policy holder.

Then came property and casualty and the fun really began.
Now, you want to insure your car, pick up, etc, anything that moves around the country.

As you have probably noticed there is some difference in premiums for what appears to be the same coverage, if you ask different companies.

Behind the scenes the rates are largely based on your driving habits, including how many miles you drive and what the accident ratio is in your area. So if you live in a community or city with a lot of “crummy” drivers the rates will be higher for everyone in that problem age group.

When we start to complain about insurance companies, we need to remember that there is a lot of cost involved so that you can have a policy and be protected.

Always rely on your agent for the best advice. They put in a lot hours of study and research on your behalf. Believe it or not, it matters a lot to them if you are happy. They have a lot of guidelines in which to operate, so be patient when you chose your agent. He/She will be there for you when you need them the most.

Post Provided by Jo Anne Morris [Email Her]

So my good buddy, Chris, along with his lady pal moved down south last year. Long story short they have decided to move back to good old Boston Massachusetts. I guess they got tired of the warm weather and missed the snow. I got a call from Chris this morning (I promise this story is true) and he said “hey Duff, the wife and I are renting a U-Haul to move all of our stuff home, should I purchase the auto insurance on the rental?

We get this question a lot. Although, the conversation usually goes like this; INSURED: “Hi this is Billy Button and I’m a Duffy Insurance customer and I’m in Vegas for my good pal’s bachelor party right now. I’m trying to get a rental car and they are asking me if I want to purchase the insurance on it. Should I buy it? To cover their behinds most insurance agents always recommend purchasing the coverage. That’s the lazy answer! But, below is some stuff your typical insurance agent may not tell you. (If you travel outside the U.S. the following does not apply. If you are traveling anywhere for business, then the following does not apply).

As an auto insurance buyer here’s some of what you need to know about getting insurance on a rental car.

We are going to assume that you rent a car in the U.S. that is similar in style and value to what you own, then your own auto insurance should cover the rental car. Always call your insurance agent to double check. If you have collision coverage on your personal auto insurance then it should cover you for the rental car. But, if you do not have collision coverage on your policy, then obviously you do not have collision coverage on the rental. This is the same with all the individual coverage on your auto insurance.

The tricky stuff:

1. Should you not choose to purchase the insurance from the rental company and rely on your own insurance, the vehicle that you have at home is not supposed to be driven by anybody.
2. Should you rent a vehicle that is nothing like your own, (My Buddy Chris in the above example) then your personal auto insurance will not cover you in most cases. So, buy the insurance if you want coverage!
3. If you are not listed as a named insured on your policy at home, then coverage will not follow you from that insurance policy. So buy the coverage at the rental counter! (Please note a named insured is different from being listed as a licensed operator).
4. An issue when declining to purchase the coverage from the rental car company is that typically your primary auto insurance company will not cover the loss of use. This usually gets charged to your credit card by the rental company and can be a nightmare. Loss of use is the money that the rental car company would have made by renting during the time that the car was being fixed. We have heard a few cases in which the rental company charged the renter’s credit card on file for loss of use.
5. Credit Card companies are typically an X factor when renting cars. Some credit card companies will offer certain types of insurance coverage for rental cars complimentary. We strongly recommend contacting them as certain ones will pay for the loss of use talked about in the last point.

So my advice to my good pal Chris and his lady friend was to buy the insurance on the U-Haul. Obviously, since there are many factors involved, it really depends on the situation when determining whether or not to buy the coverage from the rental company. I know when I go away I always purchase the insurance. We have seen too many cases where people get burned for not doing so. When in doubt call your insurance agent, credit card company, and insurance company.

Provided By @DuffyInsurance

Sump pump failure and sewer back-up claims are one of the highest claimed losses made on a homeowners policy.  There are many factors and reasons these types of losses happen frequently and unfortunately some of them are hard to control.

• Electricity goes out during a storm
• Sump pump burned up because of heavy usage
• Left the sump pump unplugged (I’ve seen it)
• Too much rain and the pump cant keep up
• Storm sewers can’t keep up causing water to back up in your home.
• A clog in your pipes
• Tree roots blocking your pipes
• Float malfunction on the pump

Storms come and storms go, its nature.  One of these acts are bound to happen to you.  Please prepare yourself because when it does you don’t want to be on the short end of the stick with your insurance company. Lets look at two things to consider when making sure you are well covered because believe it or not most of you will have this type of loss at your home.

Additional Endorsement

Make sure you purchased the coverage.  It sounds simple doesn’t?  There are many times homeowners have been stunned they didn’t purchase the insurance.  Some even say, “If my agent would have offered it…” Most insurance policies (if not all) “out of the box” do not cover sump pump and sewer back-up claims.  I tend to believe that some agents don’t even want to tell you about the additional coverage. Why? You would think they want to sell you as much insurance as possible, right?.  Most likely they don’t because it effects their pay if their clients have claims frequently.  The sales of the endorsement doesn’t out way the cost in pay for the frequency and amount of claims.  Flat out, its high risk.  Inspect your policy and look for this coverage, if you have it GREAT!  If not, GET IT!  If you don’t understand your policy, call your agent.  They should be more than happy to help you explain if you have coverage.  If they are not happy to explain it, get a new agent immediately.

Endorsement Limit

Get the highest limit you can get for the endorsement.  Anybody that signs up for a new insurance policy from about 10 years ago to present day has limited cap on coverage for this endorsement.  The old policies, that some people still have, are Willy Wonka’s “Golden Ticket”.  The older policies provide coverage for sump pump and sewer back-up with normal policy limits.  That means if you insured the structure of your home for $250,000, you had $250,000 to replace things with same like and quality of material and labor.  Use this as a reason not to move.  If you move you lose your “Golden Ticket” policy.  Now days? It is impossible to get that coverage.

The insurance companies have now capped this coverage with much lower limits, because of the risk.  The limits I see the most are $5,000.00, $10,000.00, $20, 000.00 and $30,000.00.  Out of those? the $5,000.00 limit is most used but not nearly enough.  Some insurance companies combine contents and structure coverages together in the capped limit making it harder to restore, replace, repair your damages without “out of pocket” expense.  Again, check your policy or call your agent and get an understanding.  If it is lower than $10,000.00, get more, especially for those that have finished basements.

A Typical Scenario

Hypothetically speaking, you have a 1200 square foot basement that is half finished with a family room containing carpet, pad, drywall, detailed with nice wood trim and fully furnished with sofa, love seat,  entertainment center and tv etc.  The unfinished room is used as a laundry room with washer and dryer.  Most cases people have a endorsement coverage of a $5000.00 which includes contents and structure.

A storm came through knocking out power to your home,  your sump pump is no longer working.  This causes 3 inches of rain water to flood your basement. Just as that water came unexpectedly rushing in, so comes flooding in the stress and anxiety of trying to get your life and home in order.

First, step would be to hire a professional restoration company to come and dry out the basement.  This maybe expensive but in the long run a quality restoration company should be able to, at the least, save your drywall, trim, most likely 75% of your personal property and prevent mold and mildew from forming. Sometimes, a professional may be able save your carpet but in this case they are not able to save it.  The average bill for a restoration contractor to perform this 3-5 day drying process would be $2000.00-$3000.00.

The water damaged the bottom of the entertainment center, an end table and a computer tower that was on the ground.  The washer and dryer are salvagable but need $400.00 repair.  Carpet and pad will need to be replaced and the freezer full of food that was in your laundry room has to be replenished because the power outage spoiled the frozen meat.

Cost:

+ $2500.00 Restoration Contractor

+ $1900.00 Personal Property Damage

+ $300.00 Spoiled Food

+ $1500.00 Carpet and Pad Replaced

= $6200.00 Total

- $5000.00 Insurance Coverage

= $1200.00 out of your pocket.

This is a typical sump pump claim.  Imagine if you had drywall damage, trim needed to be replaced and you had more contents loss.  You can easily tack on another couple thousand to the “out of pocket” expense.

Conclusion

Nobody wants to think this would happen to them.  The statistics show you have a good chance for this type of damage in your home to occur.  It will definitely be a high stress situation for you and your family.  One way to relieve the stress is to know you have the sufficient coverage to bring your home back to pre-loss condition. Think about how much your contents are worth in your basement, the structure, the cost of getting your house restored and dried.  Then add 10%-15% for unknown variables you are not thinking about.  Add all of that together and the total is a great gauge in deciding how much coverage you should purchase from your carrier.

“Sorry you don’t have coverage” is not what you want to hear when disaster strikes.  Sadly last year about this time – when it seemed to rain every hour of every day – many homeowners were told this as their homes were filling up with water.

The primary reason homes were not covered was they didn’t have flood insurance.  Flood insurance protects your home for water damage caused by the sudden accumulation of surface water or mudflow.  What most people don’t realize is everyone is in a flood zone.  If you are in a high risk flood zone and have a mortgage you must purchase flood insurance.  If you are in a low risk flood zone or you don’t have a mortgage, flood insurance is not required however it can be purchased in most communities at a preferred rate.

Another coverage that may have helped some homeowners is sump-pump or water back-up coverage.  This is an endorsement that can be added to your homeowner’s insurance for an additional premium.  If added it provides coverage for the cost to remove water and for the damage that occurs if water back ups through your sump-pump or drains.  Companies differ on what they cover and how much coverage they offer, but this coverage is extremely important especially if your home has a finished or partially finished lower level.  (Unfortunately there is no way to insure against seepage.)

Water damage isn’t of course the only disaster that can occur to your home.  What if your home is struck by a tornado or you have a fire?  Thankfully in either of these cases you are probably covered pretty well provided your home is insured with a quality company.  Yet it doesn’t hurt to verify that your policy provides extended or guaranteed replacement cost on your home and replacement cost for your contents.

Extended or guaranteed replacement cost coverage for your home covers the cost to rebuild your home even if the amount needed to rebuild is more than you’re insuring your home for.  This may not seem likely but you would be surprised how much it costs to rebuild a home.  How much additional coverage you have depends on the insurance company and the type of policy you have.  Some companies provide an additional 20% while others offer policies that have no limit – obviously this is preferred if available.

Replacement cost on your contents very simply means you would receive a new recliner if damaged not $50 because that’s all your old recliner was worth at the time it was damaged.  Now don’t start thinking this is your opportunity to upgrade from a cloth recliner to the leather you’ve always wanted.  If you have the replacement cost coverage you would receive a recliner that is similar in style and quality as the one you lost.  Without the additional coverage you would only receive the $50.

Thankfully the flooding that occurred last year was a rare occurrence but it was a reminder that disasters do happen.  When it does will you be covered?